IRS Nominee: ‘Solve The Funding Problem’

John Koskinen, President Obama’s nominee for IRS commissioner, vowed Tuesday to work with Congress to increase the IRS budget.

“We need to solve the funding problem facing the IRS. This is a view shared today by the IRS oversight board, the taxpayer advocate and most recently, the treasury inspector general for tax administration and the Internal Revenue Service’s advisory council,” Koskinen said at a Senate Finance Committee hearing.

In his prepared testimony, Koskinen, who left the board of Freddie Mac in February 2012 and was nominated to the IRS post in August, elaborated on his position.

“As a TIGTA report this fall noted, the government has saved $1 billion in cuts to the IRS budget and lost $8 billion in compliance revenues. I don't know any organization in my 20 years of experience in the private sector that has said ‘I think I'll take my revenue operation and starve it for funds to see how it does,’” he said.

“The IRS will have 11,000 fewer people working during this upcoming filing season while processing the largest number of returns in its history. I don't care how efficient you become, that is not a recipe for success or improved compliance and taxpayer service,” Koskinen testified.

Koskinen said his message is not a new one.

“It has been delivered before. We often think that a discussion about a problem means we have dealt with it. Let me just say that we have not dealt with the problem and it is not going away. I look forward to working with you to find a solution,” he said.

Koskinen told the committee that the public’s trust is the most valuable asset of the IRS, noting that the tax-exempt organization filing process needs to be improved.

“Taxpayers need to be confident that they will be treated fairly no matter what their background or their affiliations,” he said.

He also said that mistakes are going to happen at the IRS.

“My commitment, if confirmed as commissioner, is that we will work to have no mistakes. But, with 95,000 employees and the range of challenges the agency faces, mistakes will happen. So the realistic goal is to find problems quickly, fix them promptly, make sure they stay fixed, and be transparent about the entire process,” Koskinen said in his prepared remarks.

“To do this, we have to listen to not just employees but also others who are most likely to know about the challenges the agency faces. A government manager's best friends can be the Inspector General and the Government Accountability Office. They don't create the problems they highlight; they just help you know about them before they get bigger. In addition, the IRS benefits from the information and perspective generated by the Office of the Taxpayer Advocate and the Whistleblower office.”